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Local Union 513 Pension Fund v. Susie's Construction, Inc.

United States District Court, E.D. Missouri, Eastern Division

July 28, 2016

LOCAL UNION 513 PENSION FUND, et al., Plaintiffs,
SUSIE’S CONSTRUCTION, INC., et al., Defendants.



         Plaintiffs, Local Union 513 Pension Fund (“Pension Fund”) and one of its Trustees, filed this action seeking to collect a withdrawal liability assessment under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001, et seq. (“ERISA”), as amended by the Multiemployer Pension Plan Amendments Act of 1980, 29 U.S.C. §1381, et seq. (“MPPAA”). Defendants are Susie’s Construction, Inc. (“Susie’s”), an administratively dissolved Missouri corporation, and its former officers, Susie York and Bud (Myson) York (collectively “Defendants”). Plaintiffs move for summary judgment. (Doc. No. 11) The motion is fully briefed and ready for disposition.

         I. Facts

         The Pension Fund is an employee benefit plan within the meaning of Sections 3(1) and (3) and (37), 502 and 515 of ERISA, 29 U.S.C. §§1002(1), (3), (37), 1132 and 1145; Patrick P. Kammer is the duly designated and acting Trustee of the Pension Fund. (Complaint, Doc. No. 1 at ¶ 1) Susie’s was administratively dissolved by the Missouri Secretary of State in 1998. (Plaintiffs’ Statement of Undisputed Facts (“SOF”), Doc. No. 12 at ¶¶ 14-15) At the time Susie’s was administratively dissolved, its President was Susie York and its Vice President was Bud York. (Id. at ¶¶ 16-17)

         It is undisputed that Susie’s was party to a series of collective bargaining agreements with the International Union of Operating Engineers, Local Union 513 (“the Union”), covering the period May 1, 1995 through April 31, 2014. (SOF at ¶ 2) These collective bargaining agreements required Susie’s to, inter alia, make contributions to the Pension Fund on the basis of all hours worked by covered employees. (SOF at ¶ 3) Susie’s withdrew from the Pension Fund as of March 31, 2009. (SOF at ¶ 4) Plaintiffs have calculated the withdrawal liability assessable to Susie’s based upon a complete withdrawal from the Pension Fund as of March 31, 2009, at $20, 861.00. (SOF at ¶¶ 8-9)

         On December 1, 2014, Plaintiffs sent a letter to Defendants, received by Susie York on December 4, 2014, notifying them that Defendants (and all trades or business under common control with Defendants) were subject to withdrawal liability in the total amount of $20, 861.00 determined on November 17, 2014. The letter provided an amortization schedule comprised of three (3) quarterly payments of $6, 948.15, and one final payment of $16.54. The first monthly payment was due January 1, 2015. (SOF at ¶¶ 8-9)

         Defendants did not respond to the December 1, 2014 letter. (SOF at ¶ 10) Defendants failed to request the Pension Fund review its assessment within ninety (90) days of receiving notice of withdrawal liability, which ended on March 4, 2015. (SOF at ¶ 12) Defendants also failed to demand arbitration of the withdrawal liability assessment. (Id.) At no point has Susie’s paid any of the assessed withdrawal liability, either in a lump sum or quarterly payments. (SOF at ¶¶ 11, 13) On June 12, 2015, Plaintiffs gave written notice to Defendants that it had failed to make the scheduled withdrawal liability payments. (SOF at ¶ 18) Plaintiffs filed this action on August 26, 2015 to collect unpaid interim withdrawal liability payments and enjoin violations of ERISA and an employee benefit plan.

         II. Legal standard

         Summary judgment is appropriate when no genuine issue of material fact exists in the case and the movant is entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The initial burden is placed on the moving party. City of Mt. Pleasant, Iowa v. Associated Elec. Co-op., Inc., 838 F.2d 268, 273 (8th Cir. 1988). If the record demonstrates that no genuine issue of fact is in dispute, the burden then shifts to the non-moving party, who must set forth affirmative evidence and specific facts showing a genuine dispute on that issue. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). In determining whether summary judgment is appropriate in a particular case, the evidence must be viewed in the light most favorable to the nonmoving party. Osborn v. E.F. Hutton & Co., Inc., 853 F.2d 616, 619 (8th Cir. 1988). Self-serving, conclusory statements without support are not sufficient to defeat summary judgment. Armour and Co., Inc. v. Inver Grove Heights, 2 F.3d 276, 279 (8th Cir. 1993).

         III. Discussion

         A. ERISA and MPPAA - Statutory scheme

         ERISA was enacted in 1974 to ensure that employees who were promised pension benefits would receive those benefits on retirement. PACE Indus. Union-Mgmt. Pension Fund v. Troy Rubber Engraving Co., 805 F.Supp.2d 451, 456-57 (M.D. Tenn. 2011) (citing Mason & Dixon Tank Lines, Inc. v. Cent. States, Se. & Sw. Areas Pension Fund, 852 F.2d 156, 158 (6th Cir. 1988). ERISA was amended in 1980 by the MPPAA, which responded to the problem of employers withdrawing from multiemployer pension plans when diminishing overall participation forced remaining employers to contribute at a higher level in order to meet the funds’ past liabilities. Id. To address this problem, “[t]he MPPAA requires employers who withdraw, completely or partially, from a multiemployer pension plan to contribute to the plan a proportionate share of the unfunded, vested benefits.” Id.

         Relevant to this case, “complete withdrawal” is “when an employer (1) permanently ceases to have an obligation to contribute under the plan, or (2) permanently ceases all covered operations under the plan.” 29 U.S.C. § 1383(a). The amount of an employer’s withdrawal liability is determined by a plan’s trustees, who must show the employer was obligated to contribute to the plan under a collective bargaining agreement and that the employer has withdrawn from the plan. 29 U.S.C. §§ 1382, 1392(a). The amount of the withdrawal liability is determined according to a formula provided in 29 U.S.C. §§ 1381(b) and 1391. Once the employer’s withdrawal liability is determined, the plan sponsor must, “as soon as practicable, ” notify the employer of the amount of liability and make a demand for payment. 29 U.S.C. §§ 1382, 1399(b)(1).

         After receiving notice of withdrawal liability, the employer has ninety days to (i) request that the plan sponsor review “any specific matter” regarding the liability and payment schedule determination, (ii) “identify any inaccuracy in the determination of the amount of the unfunded vested benefits allocable to the employer, ” and (iii) provide the plan sponsor additional information. § 1399(b)(2)(A). If there is “any dispute … concerning a determination made under sections 1381 through 1399 of this title, ” either party may initiate arbitration “within a 60-day period after the earlier of (A) the date of notification [of the plan sponsor’s response to the request for review] …, or (B) 120 days ...

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